Although most businesses operate partially or even totally online, there are still businesses that must have a physical property. Businesses such as restaurants, daycares, pet salons and bars must have somewhere to operate. When looking for a location for their business, many businessowners can get caught up in the excitement and forget about one of the most important aspects of finding a commercial property—the insurance.
Commercial property isn't known to be cheap, and a single disaster could sweep away all your hard-earned money and leave your business with no location and no way to recover. Luckily, there are different policies you can purchase to insure your business' physical assets.
What Does Commercial Property Insurance Cover?
Commercial property insurance is basic coverage that protects the physical assets of your business. It protects the commercial building, its attached structures and its contents in case of:
- Fire
- Explosion
- Wind
- Hail
- Theft
- Vandalism
Depending on your location and the value of the business' equipment, you may need additional coverage such as:
- Flood Insurance: Flood damage is not covered under basic commercial property insurance. You can purchase a separate policy in order to protect your company’s belongings from flood damage.
- Earthquake Insurance: Earthquakes are another disaster not covered under basic commercial property insurance. If you live in an area with a high rate of earthquakes, you may want to purchase a separate policy.
- Equipment Breakdown Insurance: Equipment breakdown insurance provides compensation if your company's equipment suddenly breaks down due to mechanical or electrical error. This insurance helps pay for repairs or a replacement.
- Commercial Auto Insurance: Some businesses own or use commercial vehicles for work purposes. Personal auto insurance policies will not cover work vehicles, so it's crucial to have the right coverage in the event a commercial vehicle is lost or damaged from an accident. Commercial auto insurance offers a lot of the same coverage as personal auto insurance, such as comprehensive, collision, personal injury protection and uninsured/underinsured motorist coverage.
The coverage limits you need also depends on the unique aspects of your business. The size, location and industry all factor into your business' specific coverage needs. Even if you rent out a commercial property, you may still be expected to carry property insurance for your business' belongings. Also, be aware of the liability you may face while renting, borrowing or leasing equipment.
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